UPDATE 2-Microsoft tackles iPad with Surface tablet

June 18, 2012|Reuters

* Software company launches own 'Surface' tablet

* Two versions: one runs Intel, one ARM

* No pricing, firm release date details

By Lisa Richwine

LOS ANGELES, June 18 (Reuters) - Microsoft Corpintroduced its own line of tablet computers on Monday at amuch-hyped press event in Los Angeles, marking a major strategicshift for the software giant as it struggles to compete withApple Inc and re-invent its aging Windows franchise.

The new tablet line, named Surface, includes a consumerdevice aimed directly at the Apple iPad, and another, largermachine designed to run the full suite of Windows software. Bothinclude a keyboard that doubles as a cover for the device, andboth will be powered by the new Windows 8 operating system.

The move breaks with Microsoft's operating model of the past37 years, which has relied on computer manufacturers to make andmarket machines running Windows. It could throw the world'slargest software company into direct competition with itsclosest hardware partners such as Samsung Electronics Co Ltd and Hewlett-Packard Co.

However, the success of Apple in recent years hasunderscored the benefits of an integrated approach to hardwareand software, and Microsoft CEO Steve Ballmer said on Mondaythat the company "didn't want to leave anything uncovered" as itrolled out Windows 8.

The new software is the biggest overhaul of Windows inyears, and features a new interface, dubbed "Metro", and manytouch-friendly features. It is scheduled to be available for theChristmas shopping season.

A lighter, thinner version of the Surface tablet, based onchips designed by ARM Holdings, will be the first tomarket at the same time as the general release of Windows 8, andwill feature Microsoft's popular Office suite of applications.

It is comparable to Apple's new iPad, heavier but slightlythinner. It has a 10.6 inch screen and comes in 32GB and 64GBmemory sizes.

A second tablet, running on traditional Intel Corpchips, will be heavier and thicker but come in 64GB and 128GBmodels. That will be available about three months after the ARMversion, Microsoft said.

The company gave no details on pricing, except that theywould be competitive with comparable ARM tablets andIntel-powered Ultrabooks.

Sales of tablets are expected to triple in the next twoyears, topping 180 million a year in 2013, easily outpacinggrowth in traditional PCs. Apple has sold 67 million iPads intwo years since launch.

FOLLOWING APPLE

Apple, which makes both hardware and software for greatercontrol over the performance of the final product, hasrevolutionized mobile markets with its smooth, seamless phonesand tablets. Rival Google Inc may experiment with asimilar approach after buying phone maker Motorola Mobility thisyear.

Making its own hardware for such an important product is adeparture for Microsoft, which based its success on licensingits software to other manufacturers, stressing the importance of"partners" and the Windows "ecosystem."

When it has ventured into hardware, the Redmond,Washington-based company has had a mixed record.

Apart from keyboards and mice, the Xbox game console was itsfirst foray into major manufacturing. That is now a successfulbusiness, but only after billions of dollars of investment andovercoming problems with high rates of faulty units - a problemwhich was nicknamed the "red ring of death" by gamers.

The company's Microsoft-branded Zune music player, a laterival to Apple's iPod, was not a success and its unpopular Kinphone was taken off the market shortly after introduction.

The company killed off a two-screen, slate-style prototypeof a tablet device called Courier later that year, saying thetechnology might emerge in another form later on.